SBI Cards Q2 Results Review


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Prabhudas Lilladher Report

SBI Cards and Payment Services Ltd. reported average set of Q2 FY23 numbers (profit after tax at Rs 5.2 billion down 16.2% QoQ up 52.4% YoY) below our estimate of Rs 6.7 billion due to higher than expected provisions and opex.

Receivables at Rs 377 billion (our estimate: Rs 355 billion) grew healthy 13.6% QoQ/41.4%YoY, opex increased by 10.3% QoQ and rose by 32.6% YoY leading to cost-income rising to 59.4% from 56.3% in Q1 FY23.

Yields fell (decreased to 16.4% from 17.1% in Q1 FY23) as higher yielding revolver mix decreased to 24% from 26% in Q1 FY23 of overall receivables.

SBI Cards’ asset quality improved marginally with gross non-performing assets at 2.1% versus 2.24% in Q1 FY23.

Credit costs rose sequentially to 5.6% versus 5.0% in Q1 FY23 as impairments and losses increased sequentially by 21% to Rs 5.46 billion.

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